Exercise on Unit 2 – Theories of Capital Structure 1. Companies U & L are identical in all respect except that U is unlevered while L is levered. Company L has Rs. 20 Lacs of 8% debentures outstanding. Assume a. All MM assumptions are met b. Tax rate is 35% c. EBIT is Rs. 6 Lacs d. Equity capitalization rate of company U is 10% Find the following: a. Value of each firm according to MM approach b. Suppose Value of U is Rs. 25 Lacs and Value of L Rs. 35 Lacs. According
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OPTIMAL CAPITAL STRUCTURE The optimal capital structure for a company should be the mix of equity‚ debt and hybrid instruments that minimizes the overall cost of funding‚ i.e. it should minimize the company’s weighted average cost of capital. In practice‚ however‚ it is not possible to specify this optimal capital structure exactly‚ for any individual company. It clearly makes sense to obtain funds at the lowest possible cost. In the long run‚ debt is cheaper than equity. However‚ when a company’s
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Literature Review Handout Liberty University Online Writing Center 1| Page Handout Description A review of literature is a critical analysis of a portion of the published body of knowledge available through the use of summary‚ classification‚ and comparison of previous research studies‚ reviews of literature‚ and journal articles (Subject Guides‚ n.d.). This handout discusses the reasons for writing a literature review and presents its various requirements. It examines what a literature
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REVIEW OF LITERATURE REVIEW OF LITERATURE INTRODUCTION Marketing by service industries are yet to gain momentum‚ especially when it comes to marketing by comniercial banks. In India‚ the liberalization of the financial sector has impelled all the players to redefine what business they are in and strategically think how to stay ahead in the existing business. Marketing orientation of banks is imperative for survival and success. EARLIER STUDIES Marketing of financial
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Busi 600 Literature Review Andrew Fagan Liberty University Professor Erickson Abstract The literature research reviewed in this paper attempts to address the topic of strategy implementation. The paper tries to establish an academic case for previously researched material on this subject by reflecting on the diverse views published in the literature. The different views expressed combine to formulate research to establish relevance as well as importance in this step of the Strategic Management
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Assignment: Capital Structure PART A 1. Apple Corporation has 2.5 million shares outstanding with a market value of $2.00 each (expected return = 16%) and debt with a market value of $1‚ 000‚000 and a return of 10% Required a. What is the return on the capital of Apple Corporation? [Show all workings and formulae) [7.5 marks] 2. Samsung generates pre-tax earnings of $2‚000‚000 per year. Currently it has issued 1 million shares which sell for $10 each. Samsung has no debt in
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prudent and sustainable funding sources‚ to add to their current funding mix. This is leading to a renewed interest in structured asset-backed financing solutions‚ designed to give treasurers the opportunity to rebalance and re-engineer their capital structures by offering well-priced‚ longer maturity alternatives. By securing a funding solution on the assets already owned by the company‚ or assets that will be essential to the business‚ it is possible to rebalance pricing models in a company’s favour
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Literature Review DEPARTMENT OF BUSINESS MANAGEMENT Student Name: Student Number: Contact Number: Email Address: Amkela Ngwenya 4397-434-1 082 211-5742 amkelab.ngwenya@gmail.com SUPERVISOR JS Kasozi RESEARCH TOPIC: DETERMINANTS OF CORPORATE DIVIDEND PAYMENT POLICIES: A CASE OF THE BANKING INDUSTRY IN SOUTH AFRICA Declaration I declare that the work I am submitting for assessment contains no section copied in whole or in part from any other source unless explicitly identified
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Questions frequently asked about the literature review: What are the topics...or what can I write about? Topics need to come from the course content. You may choose from the following: Any of the lecture topics Any of the sub topics within any of the chapters of your text You may choose a topic from any of the weeks as it is better to choose a topic that you are interested in or find particularly relevant from any of the unit’s topics‚ rather than be restricted to the first few or last few
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Financial Restructuring and Its Impact On Corporate Performance In India CHAPTER – 2 LITERATURE REVIEW 21 Financial Restructuring and Its Impact On Corporate Performance In India LITERATURE REVIEW Finance is the life blood of business. A unit may fall sick because of a major lubricant i.e.‚ finance. There are various mechanisms available to a firm for revival. Financial Restructuring is a favoured mechanism for firms in red. Does financial restructuring help in improving the financial
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